Two months ago, the members of the Kansas City Finance and Audit committee unanimously and enthusiastically approved a plan to issue bonds for the long-awaited Citadel Plaza shopping center at 63rd Street and Prospect Avenue.
Today, those same members angrily denied the developer's request for $20 million from city coffers and admonished everyone involved for incompetence. Now, a project 15 years in the making that's made a mess of a busy intersection is facing a very uncertain future. So uncertain, even the project's staunchest supporter had a grave forecast.
"The complexity of the project is such that, if we don't do it by the end of the year, it's dead, period," Councilman Terry Riley said.
The Citadel Plaza envisions turning a weed-choked expanse at the intersection of 63rd Street and Prospect Avenue into 300,000-square-feet of new retail space for specialty shops and restaurants. The $90-million project got its start as part of the massive Southtown/31st and Baltimore Tax Increment Financing Plan in 1994 and the Community Development Corporation of Kansas City stepped in to manage it. But, even with millions of dollars from the city and the federal department of Housing and Urban Development, the CDC has little to show for the public investment.
In September, the city council agreed to kick start the development with $43 million in city-backed bonds. After that agreement was passed, though, the developers came back with a wicked curve ball. Because the bond market is in such bad shape, the CDC and Kansas City Chief Financial Officer Jefferey Yates suggested the city front the project $20 million out of its own pocket now. The bonds will come later, as soon as economic conditions improve.
Councilmembers called foul.
Deb Hermann, chair of the Finance and Audit committee, reminded the packed session this morning that the city is facing a $90 million budget deficit in the coming year. The cash the CDC wants, she pointed out, is half the money in the city's rainy day fund. To even ask for that with a straight face, she said, is shocking.
"Ask everyone in this room, 'Would you mortgage your house for this project?'" she added. "Because that's what we'd be doing to Kansas City."
Even more shocking, Hermann said, was the fact that the CDC and city staff changed the rules in a very high-stakes game immediately after the council gave it the go-ahead. "Never, not one time, did someone say we're going to advance the funds," she said indignantly. "Not ever."
That would dramatically increase the risk to the city, said equally incredulous councilmember Russ Johnson. If taxpayers dole out the money now and nine months later the city can't get a decent interest rate on the bonds, the public will be left holding the bag. "What we're doing is trying to guess, in unprecedented market conditions, what we can do in the future," he said. "And, if we're wrong, the city is bearing the risk, not the developer."
Councilman Terry Riley, who has worked on bringing the project to his district for the better part of a decade, suggested that if Citadel Plaza doesn't get moving by the end of the year the project will die. "Guys, I know we're in risky times," he said. "But it's time for us to say, 'Man, we got to bite the bullet and make this thing happen.'"
But fellow councilmembers, like Hermann and Sharon Sanders-Brooks, fired a few volleys at the developers and city staffers working on Citadel Plaza. Several of the committee members said they never received an important memo outlining the new plan for advance funding. They got calls out of the blue, barely 12 hours before the meeting, asking them if they'd had time to read the new documents. Sanders-Brooks said if she hadn't run into the CDC's attorney on the stairs of City Hall yesterday she would have no idea what was going on with the project.
"The due diligence has not been done by the developer, its attorney, the city staff," Sanders-Brooks said, raising her voice. "These documents, these emails that I did not receive is inexcusable. And this has happened before on this project."
After animated discussion for a full hour, with councilmembers nearly interrupting each other for a chance to chime in, the committee couldn't agree what to do next.
"I guess we'll hear it again next week," Hermann said wearily.
Huddled in a tight circle with his attorney outside the meeting, CDC president Bill Threatt rubbed his eyes. I asked him if he had any reaction to the tongue lashing. He didn't have anything to say.
— Carolyn Szczepanski
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People in Kansas City were looking forward to seeing this development for several years. What the city council need to do is perform their own study of the project and not hire outside consulting firms. Hire a local consulting firm, or take it to UMKC and pitch the professor to have a disscusion about what is needed. The students to come up with ideas and perhaps a solutions. It's helping out the college and the students to see how our local government work. Kansas City is a nice place to live and I will believe that as long as I live.
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